Despite being a relatively small nation to about 5 million people, New Zealand’s market-oriented and efficient economy offers a plethora of benefits for all investors. Recognized as the most business-friendly country to register a company in New Zealand, New Zealand remains a top choice among business owners and investors. This can be attributed to New Zealand’s thriving economy, openness to international trade and a reputation for encouraging foreign investment. Here are the top 5 benefits of setting up a company in New Zealand.
- Straightforward company registration process
As the New Zealand government imposes few restrictions on establishing, owning and operating a business, this makes New Zealand an attractive jurisdiction to business owners. New Zealand company registration process is simple and quick, without needing individuals to travel to New Zealand to register a company.
Company registration can be completed online with New Zealand Companies Office and business can reserve a business name in NZ by using an online services account with the Companies Register. The process of incorporating a business in New Zealand simply takes a few hours. Moreover, business set up processes are straightforward, which include Goods and Services Tax (GST) registration, employer registration and application for an Inland Revenue (IRD) number. The Certificate of Incorporation businesses receive upon incorporation will include the company registration number. Therefore, businesses looking to set up a company in New Zealand need not worry about New Zealand company registration process being complicated and long drawn.
Those who wish to operate business in New Zealand can choose between these 5 business entities. This includes Limited Liability Company (LLC), Limited Liability Partnership (LLP), representative offices, branch offices and sole traders. If you are looking to incorporate a company in New Zealand, it is recommended to set up a Limited Liability Company (LLC). Regardless whether it is an onshore or offshore business, LLC is the most common business entity in the country as it brings about numerous benefits to businesses. There are minimal requirements prior to company formation of a LLC, including no minimum capital requirement, a local director and a shareholder.
Therefore, the straightforward and hassle-free New Zealand company registration process provides another reason to set up a company in New Zealand.
- Business Friendly Environment
It is relatively easy to start a business in New Zealand as New Zealand boasts a business friendly environment. According to the World Bank Doing Business survey 2020, New Zealand claims the top position as the easiest country to start a business. The New Zealand government is welcoming to the idea of foreign ownership and there is no need to attain any special approval during the process of company formation. As New Zealand does not impose excessive bureaucracy and legal restrictions on foreign investors starting a business, this exhibits New Zealand’s conducive regulatory environment for foreign investors.
Although New Zealand companies are subjected to a relatively high corporate income tax rate of 28% and Good and Services Tax (GST) of 15%, there are tax concessions which help to ease the financial burden on individuals . For example, individuals who are self-employed or in partnerships are able to enjoy a 6.7% discount on taxes.
If your business wishes to obtain funds for its operations, securing banking loans in New Zealand is easy. Due to its efficient banking sector, New Zealand is ranked first by the World Bank in accessibility to apply bank loans as both governments and local banks are very supportive towards SMEs. Additionally, New Zealand has established a reputation as an ideal offshore banking location for corporate account opening. Some examples of reputable banks in New Zealand include ANZ, BNZ and Westpac.
Therefore, New Zealand’s business friendly environment makes it an ideal jurisdiction for individuals looking to set up an offshore company.
- Low corruption levels
Moreover, good governance and transparency is a crucial consideration for individuals looking to set up their businesses. New Zealand is regarded as one of the least corrupt countries in the world. According to the Corruption Perceptions Index (CPI) published by the Transparency International Organisation, New Zealand ranked 1st out of the 180 countries evaluated. The CPI is the leading global indicator of public sector corruption. New Zealand’s impeccable ranking implies a low risk of corruptive activities in the nation’s public sector, thereby reinforcing an investor’s confidence in the jurisdiction’s political stability.
- Conducive Economic Climate
Although New Zealand is home to only 5 million people, it is ranked as the 53rd world’s largest economy in terms of GDP and 68th largest worldwide in terms of Purchasing Power Parity (PPP). According to the 2020 Index of Economic Freedom, New Zealand has the 2nd most open and free-market based economy in the world. This can be attributed to New Zealand’s openness to international trade as it is geographically distant from export markets.
New Zealand also has a very export-driven competitive economy, with exports accounting for about one-third of its GDP. With a strong agricultural sector and a sizeable manufacturing and service industry, New Zealand is ranked 45th largest exporter and 46th largest importer worldwide.
Additionally, New Zealand establishes and maintains stable political relationships with several nations, such as neighbouring Australia. The Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), which is a Free Trade Agreement, showcases the strong business relations of the two countries. ANZCERTA brings about a plethora of economic benefits to both countries, which includes no tariffs imposed on exports and imports to and fro New Zealand and Australia. Moreover, New Zealand has also established an extensive network of 12 Free Trade Agreements with major economies such as China and ASEAN countries. This demonstrates the New Zealand government’s sheer commitment to liberalise trade between economies and provide lower tariffs on goods and services.
With New Zealand’s export driven economy and Free Trade Agreements, this provides numerous lucrative opportunities for manufacturing and export-oriented businesses to set up their operations in New Zealand.
- Numerous Government Incentives
New Zealand boasts a vibrant and welcoming start-up environment for those looking to start a business. The New Zealand government provides a plethora of government resources and support to aspiring entrepreneurs who wish to kickstart their entrepreneurship journey in New Zealand. For example, the Business Training and Advice Grant connects new businesses with experienced mentors who provide training and advice they need to start their businesses.
Moreover, efforts such as the Flexi-Wage Subsidy aims to lower financial burdens on New Zealand businesses. The employment programme assists businesses to hire individuals on benefit as an employee and help with the training costs. As a result, this alleviates the training costs of an employee when he/she has yet to make profits for the business.
Additionally, R&D grants provided to businesses encourages them to improve on the scientific and technological front. There are several grants that are targeted at the various stages of R&D investment, which includes Getting Started Grant, Project Grant and Growth Grant.
Therefore, the wide range of government incentives is a strong testament to New Zealand’s commitment to provide a favourable environment for businesses.